HONG KONG (AFP) - The former head of Hong Kong's housing department has quit his post with a major property company, the South China Morning Post reported Saturday, after widespread criticism of the appointment.

Leung Chin-man announced his resignation early Saturday, just a week after taking up his job as executive director and vice-chairman of New World China Land.

As head of the housing department, Leung was involved in a controversial decision to sell a prime piece of land on Hong Kong's waterfront to another subsidiary of New World China Land's parent company at a discounted price.

His appointment as a director of New World China Land sparked a public outcry amid concerns about a possible conflict of interest.

A separate statement issued by the company on Saturday said: "After serious consideration, we decided to respond to the bigger picture and terminate the contract unconditionally to ease any worries in society."

On Friday, the civil service minister who approved the appointment apologised and said she had not taken his involvement in the controversial land deal into consideration when making her decision.

"In retrospect, Mr Leung's involvement in the handling of the Hunghom Peninsula development and that one of the subsidiaries of New World Development Company Limited was one of the developers involved had not been considered," said Denise Yue.

"The whole matter has caused much public concern, comments and queries. On this, I would like to express my sincere apologies."

The South China Morning Post, in an editorial, said government officials had displayed a "glaring lack of political sense" over the episode.

"They failed to anticipate the public's perception that as Mr Leung had made a decision seen to have benefited New World while in office, he was being rewarded by taking up a position with the New World Group."